Home Care Costs On The Rise in 2014

There are laws that have recently passed in California that will have a major impact on the cost of in-home care in the coming years. Also, on the Federal level, similar regulations will take effect in 2015.

On September 25, 2013, Governor Brown signed AB 10, which increases California’s minimum wage from the current $8.00 per hour to $9.00 per hour on and after July 1, 2014, and on and after January 1, 2016, it will increase to $10.00 per hour.

Governor Brown also signed AB 241 on September 26, 2013. The bill regulates the hours of domestic work employees who are personal attendants (caregivers) and provides overtime to California domestic workers. The new law requires employers to pay time-and-a-half overtime to any nanny, housekeeper, or personal attendant (caregiver) who works more than nine hours in one day, or 45 hours in a week.

Though the intent is to help low income domestic workers, most companies who employ domestic workers say that providing overtime to caregivers will make the care out of the reach for many families and the elderly, ultimately costing them their jobs. Conversely, those workers which the law was meant to help will have their hours cut to ensure that overtime is not triggered, costing them more income then the occasional overtime hour will compensate them from.

Proponents also argue that domestic workers are essential to the California economy since it allows others to participate in the workforce and therefore, deserve more comprehensive protection than they currently receive. They argue that we must protect domestic workers from abuse and mistreatment by defining industry-specific protections. This will regulate the wages, hours, and working conditions for domestic workers.

Opponents also argue that this change will drastically affect middle and lower class citizens since they will not be able to afford domestic workers, making such relied upon and necessary services only available to the wealthy. This will consequently lead to middle class employers seeking undocumented employees which will, in turn, negatively affect tax state revenue.

Though I can understand the arguments on both sides, it’s the seniors and their families that are going to feel the brunt of it this coming year. The home care companies who employ the majority of caregivers cannot absorb the overtime wages for those caregivers that provide more than 9 hours each day or 45 hours each week of caregiving. This includes live-in caregivers who are present (awake and sleeping) 24 hours each day. The effect will either be higher prices and/or caregivers rotating shifts. The negative on rotating shifts has to do more with seniors, especially those with dementia, such as Alzheimer’s. Changing caregivers on a regular basis can add to the senior’s confusion and may have a negative impact on their care.

Another concern is regulating these activities. With the emphasis on home care agencies, will the state play close enough attention to those not following these new laws? Will this open up a so-called “underground” caregiver network that charges considerably less than the home care agencies who are following the law? Will these “underground” caregivers be the ones taking advantage of the elderly who are not aware?

What’s next? Licensing caregivers. On October 13, 2013, Gov. Jerry Brown signed the Home Care Services Consumer Protection Act of 2013, which will require agencies to conduct background checks on workers, provide training, list caregivers in an online registry and obtain a license certifying their compliance with basic standards.

Protecting our seniors is essential, so as the old saying goes, “buyer beware.”

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The Boomers Today podcast was developed by Frank Samson, founder of Senior Care Authority. The show features experts in various areas relative to the issues boomers and their families are faced with on an everyday basis including senior care, nutrition, insurance, estate planning, brain health and much more! Listen!